Recession-hit Japan economy shrinks for third straight quarter

TOKYO (AFP) - Japan's economy shrank for a third straight quarter in October-December, data showed Thursday, leaving it mired in recession owing to weak export demand, but analysts pointed to brighter times ahead.

Tokyo logged a 0.1 percent contraction in October-December from the previous three months, indicating the work ahead for Shinzo Abe's new government as it looks to kickstart growth while fending off claims it is manipulating the yen to boost exports.

Financial turmoil in key market Europe, a strong yen and a diplomatic row with China have hurt Japan, frustrating hopes that it would cement a recovery from the 2011 quake-tsunami disaster that battered domestic demand and output.

The country logged growth of 1.9 percent for 2012 compared with the previous year.